In india, the use of credit cards is growing quickly. A credit card is a device that the user can use to purchase goods on credit from any place in the marketplace. The payment period is roughly forty-five days. When payments are made on time, cashback and perks are offered, but what advantage do banks gain from this? You must be wondering the same thing. Let's investigate this.
 
How Do Banks Earn From Credit Cards?
Credit cards generate income for banks in a variety of ways.  For instance, the banks charge you a hefty interest rate if you fail to pay the payment on time.  In addition, the primary revenue streams for banks include interchange fees, yearly fees, and card re-issuance fees paid to merchants.  The amount that the merchant must pay the bank for each transaction is known as the exchange fee.  This is the rationale behind indian banks' efforts to quickly expand credit card use.
 
Despite being somewhat lower than the previous month, credit card expenditure in india increased 10.8% to Rs 1.84 trillion (Rs 1,84,000 crore) in january 2025.

How Do Credit Cards Attract Users?
Rewards programs, rebates, travel discounts, and the opportunity to raise one's credit score are just a few of the many advantages that credit cards provide their customers.  These days, a lot of indians are utilizing credit cards to establish their credit history, which is essential for future loan applications.  Your creditworthiness will increase if you pay the bill on time.
 
Customers are encouraged to make repeat purchases by reward programs like loyalty points and rebates.  To ensure that this industry can continue for a long time, banks and the RBI are strengthening their regulations in response to the growing number of credit card abuse cases.

The regulatory structure and obstacles
 
Banks are dealing with fraud and monitoring issues as a result of the growing use of credit cards.  To lower the risk of unsecured loans, such as credit cards, the RBI has released guidelines.  As a result, banks are now compelled to decrease consumer loans and concentrate on increasing deposits.
 
Banks must fortify their tactics in light of the growing indian credit card sector to proceed risk-free.  Customers must carefully control their spending in 2025 because fees and reward programs are changing quickly.

What should a user look for?
 
In order to make the best choice, credit card users need be aware of the banks' business models.  Its popularity is demonstrated by the quick expansion of the credit card portfolios of major banks including hdfc bank, SBI, Bajaj Finance, and ICICI Bank.  The sector is also changing as a result of the rise of fintech and wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital payments.
 
Credit cards are becoming more appealing as a result of banks' investments in technology to enhance customer satisfaction and security.  Partnerships between banks and fintech are also growing, providing clients with more convenient services.
 
Lastly, before utilizing a credit card, it's critical to establish your financial objectives by speaking with experienced financial consultants. This will improve your comprehension of lending products.
 
 
 
 


 
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SIBY JEYYA

16/03/2025 10:36 AM